China's Enterprise Bankruptcy Law (EBL 2006): cross‐border perspectives

Abstract

With China's new Enterprise Bankruptcy Law ('EBL 2006') having come into e¡ect on1June 2007, a critical issue arises as to the extent to which Article 5, as a cross-border provision, will strengthen creditors' rights across jurisdictions. In this paper attentionwill be paid inparticular to how the Chinese People's Court is likely to exercise its discretion to grant recognition to a foreign court ruling, and vice versa. The paper will start with a brief introduction to the circumstances under which Article 5 came into being. The evolution of China's cross-border insolvency practices will be examinedthrough an analysis of an inboundcase of B&T (2002) as well as an outbound one of GITIC (2005). In spite of the fact that China has not adopted the UNCI-TRAL Model Law, essential factors deemed necessary to be considered by China's court and its counterparts in US and UK are to be highlighted throughout the paper. Although the e¡ect of Article 5 remains to be seen, it will be critically analysed focusing on some controversial issues.

Globalized Cross-Border Insolvency Law: The Roles Played by China

“…This Section states that if a foreign bankruptcy judgment is recognised in China under Article 5 of the EBL 2006, the company's assets located in China could be distributed according to the general foreign bankruptcy asset distribution plan after fully paying domestic secured creditors, employees and tax authorities. Actually, in order to do this, this means that a 54 Bu (2009), p 202. 55 Parry and Gao (2018).…”